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Assessing the Anticompetitive Effects of Multiproduct Pricing

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Author Info
Dennis W. Carlton
Patrick Greenlee
Michael Waldman

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Abstract

In response to the "standardless" approach used in LePage's v. 3M, the Antitrust Modernization Commission (AMC) and others advocate using a discount allocation approach to assess whether bundled loyalty discounts violate Section 2 of the Sherman Act. This approach treats loyalty discounts like predatory pricing. The analogy to predatory pricing is flawed. We propose an alternative approach that focuses on the presence of significant scale economies. We use our approach to analyze LePage's, as well as the recent PeaceHealth decision.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14199.

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Date of creation: Jul 2008
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Handle: RePEc:nbr:nberwo:14199

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L4 - Industrial Organization - - Antitrust Issues and Policies

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This page was last updated on 2009-11-25.

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